With increasing telehealth appointments due to Covid and high deductible healthcare plans on the rise, it is high time that we learn about how the medical billing system works. Learning about it is equally crucial for us as much as it is for healthcare providers.
The revenue cycle of a healthcare system starts from the time when a patient/service receiver makes an appointment to the time they pay for the consumed services. The process is called the revenue cycle management process in medical billing if it is conducted on a healthcare management system.
For your better understanding, below, we have attempted to give you a closer look at the process, including factors affecting the revenue cycle and its vendors and key organizations.
What exactly is (RCM)?
A revenue cycle management process (RCM) compiles the clinical and business sides of a healthcare system by combining administrative data, like the patient’s name, age, address, insurance provider, and other relevant information with the treatment they are opting for.
Communicating with a patient’s health insurance company is one of the main steps in the revenue management cycle process. When a patient makes an appointment with a hospital, the workers immediately check their insurance coverage prior to their visit. Once the patient receives treatment for a given condition, the healthcare workers categorize the treatment as per ICD-10 codes. The care facility then shares the service summary with Current Procedural Technology and ICD to the patient’s insurance company along with their billing receipt to check what portion of the treatment will be covered by their insurance agency.
What is Revenue Cycle?
The Health Financial Management Association defines the revenue cycle as “all administrative and clinical functions that contribute to the capture, management, and collection of patient service revenue.”
It starts when a patient makes an appointment and gets an account created on the system through payment for the care or particular surgery.
To ensure the swift performance of a revenue cycle, it must be predictable. All of its processes need to work efficiently and accurately, which is in itself a big task. If there is a glitch in the beginning, the entire process will be affected, resulting in slow payments and billing errors. Getting things back on track would be costly and time-consuming.
Following are the steps involved in a revenue cycle:
- Charge capture – making billable charges for rendering medical services
- Claim submission – sharing billable fee claims with insurance companies.
- Coding – accurately coding tests and procedures.
- Patient collections – Checking balances and collecting payments.
- Preregistration – gathering preregistration data like insurance coverage for inpatient and outpatient procedures, before the patient visits.
- Registration – establishing medical records by collecting subsequent information to meet clinical, financial, and other regulatory requirements.
- Remittance Processing – accepting payments through remittance processing.
- Third-party follow-up – receiving payment from insurance providers.
- Utilization review – critical evaluation of the necessity of medical treatment.
Like every financial process, several internal and external factors affect the functioning of the revenue cycle.
Factors affecting Revenue Cycle
Typically, healthcare agencies have some control over internal dynamics, like, as patient volume, services fee, provider productivity, etc. However, dealing with external factors is quite tricky. For instance, dealing with payment issues and claim reviews from patients’ insurance providers.
Purpose of revenue cycle management process in medical billing:
Below we have detailed why a revenue cycle management system is crucial for patients and healthcare providers.
1. Patient’s records management
Several healthcare agencies have deployed RCM systems for the smooth functioning of revenue cycle processes in medical billing. The system is primarily designed to store and manage patients’ billing information and reduces the time window between scheduling appointments and receiving final payment. The RCM system interacts with other health IT management systems like electronic health records (EHR) as service takers move through the care procedure.
2. Duties Automation
An RCM system manages workload efficiently by automating duties previously performed by healthcare workers. It handles duties comprising administrative tasks, such as keeping patients’ data updated, tracking their upcoming appointment, reaching out to insurance companies when a problem occurs during an insurance claim, and reminding patients of their balance.
3. Rectification of insurance claim issues
An RCM system also saves patients money by giving them a deep insight into why insurance providers have denied their claims. Not just that, it reduces denied claims volume by prompting healthcare workers to enter all necessary information required for claim acceptance. This saves time from revising and re-applying for claims and gives a better idea of why a claim was denied. The system further ensures that the healthcare workers are remunerated properly for treating medical patients.
4. Correct assigning of medical codes to each patient
A revenue cycle management can also include cognitive computing technology to assign accurate medical codes to each patient. It speeds up the process via robotic process automation technology.
Following is the run-down of key organizations that provide stand-alone RCM as well as integrated systems with other health IT management systems.
- McKesson – Major healthcare products and services providers in the United States.
- Cerner – American supplier of health IT devices, services, and hardware.
- GE Healthcare – Providers of data analytics, digital infrastructure, and decision support tools to healthcare organizations.
- ADP – Global outsourcers for cloud-based human capital management (HCM) solutions that also focus on advanced medical imaging technology and new development in health IT.
- Epic Systems – Health IT service providers are mainly used by large US facilities and healthcare systems to organize, store and maintain patients’ medical data.
- Allscripts – Global healthcare leaders in selling software services to various hospitals and healthcare organizations.
An RCM system aims to simplify and integrate several parts of the billing process into one system. From scheduling appointments to billing, it automates all the tasks to minimize the chances of error. Via this, healthcare providers achieve more transparency through the entire caretaking process and allocate more resources to improving patients’ health. Isn’t that the ultimate goal of every healthcare provider?!